Milder weather welcomed in Canada's fire-stricken energy heartland

Reuters News
Posted: May 20, 2016 9:14 AM

By Eric M. Johnson and Nia Williams

CALGARY (Reuters) - Firefighters battling a massive blaze in Canada's energy heartland could see a second day of rainfall and winds on Friday, expected to beat flames back from key oil sands facilities, as a producer announced a restart in operations.

The wildfire in northern Alberta has charred some 505,000 hectares (1,950 square miles) of land, more than six times the size of New York City, since it hit Fort McMurray in early May.

It has forced widespread evacuations and triggered a prolonged energy shutdown that has cut Canadian oil output by a million barrels a day.

The fire's footprint now exceeds the total area burned during Alberta's entire 2015 fire season, and flames spread by Thursday into the neighboring province of Saskatchewan.

Even so, cooler weather and rain across the province have worked in firefighters' favor, and a shift in winds over the previous two days has pushed flames away from communities and oil sands facilities in the Fort McMurray area.

Mother Nature was expected to bring similar conditions again on Friday, said wildfire information officer Travis Fairweather.

"We've been seeing a lot of rain across the province, but Fort McMurray and Lac La Biche are remaining a little bit drier than all the other zones," Fairweather said on Thursday.

Alberta's GDP is expected to take a hit as a result of the fire, the government said this week. It comes on the back of a two-year slump in global crude prices.

On Thursday, credit agency S&P cut the province's debt rating to AA from AA+, citing a weak budgetary performance and high debt.

Canadian crude prices rose on Thursday after trading sources said Syncrude told customers to expect no further crude shipments for May.

In a more encouraging sign, Imperial Oil said it had restarted limited operations at its Kearl site, which had been unaffected by the fires.

Some of the 90,000 evacuees who fled as the massive blaze breached Fort McMurray may be allowed to return as soon as June 1, if air quality improves and other safety conditions are met.

The fire destroyed a 665-room lodge for oil sands workers on Tuesday, but officials said there was no further threat to facilities. Even so, a mandatory evacuation order remains in place at 19 work camps north of Fort McMurray.

Among those eager to return was Abdurrahmann Murad, a 38-year-old religious leader, who said the rain had brought some relief to the community.

"The rain has been falling, and we pray to God (the fire) doesn't come back toward the city," Murad said by telephone.

(Reporting by Eric M. Johnson and Nia Williams in Calgary; Editing by Clarence Fernandez)